Saturday, December 13, 2014

Timeshares and Bankruptcy

While it may seem like a swell idea when you attend their seminar, down the road, you can be in for a world of woe, when it comes to timeshares.

One of the epitomes of silly purchases, besides Jet Skis, is timeshares.   If you bought both, congratulations, you're the new idiot of the month.

Why do I say this?   Well, when you search online, you find a lot of interesting articles and discussions about timeshares - and most of them outline financial nightmares
The Timeshare Company goes Bankrupt:  The development is padlocked and sold off in bankruptcy court.  Meanwhile, you are still being dunned for your "maintenance fee" and of course the payments on the loan you took out to buy the timeshare.   Getting out from underneath both, can be difficult.

You go Bankrupt:   You've made a lot of bad choices in life, including buying a timeshare.   Not only did you squander tens of thousands of dollars by purchasing it, you spend hundreds a year on "maintenance fees" to maintain your one-week condo (often more than the cost of renting a hotel room nearby!).   So you declare bankruptcy, hoping that this will relieve you of the burden - you can give up the timeshare and no longer have to pay maintenance fees.   Guess what?  They don't want your share back - and in theory, they could, in some States, make you keep paying maintenance fees - forever!

Your Parents Die:   Your Mom and Dad weren't very smart, and as they got older, they got more and more confused.  They went to a "free seminar!" after getting a postcard in the mail promising them a free gas grill if they would attend a timeshare seminar.   The nice people they meet at the seminar all rave about what a great "opportunity" this is!  So Mom and Dad buy a timeshare.   It never quite worked out the way they thought it would - and those maintenance fees kept going up!   And as they get older, they can't use the timeshare anymore - and are chagrined to find out they cannot even give away their "investment."  They pay $500 to a "timeshare resale company" only to have that money evaporate as well.  They finally die and leave you their estate.  The timeshare company now comes after you for the maintenance fees for this worthless "investment."

You Just Don't Like It:   The timeshare in the West Virginia mountains seemed really nice when you first went there.  But then you realize it is a four-hour drive from your home, and not really near anything of interest.   It is like going to a motel room in the middle of nowhere for a week, and a rather expensive motel room at that.   Worse yet, after a few years, the brand-new amenities start to look worn out.  The hot tub is broken, and the cheap texture 1-11 siding on the building is mildewing and rotting off.  It all looked so nice and fancy when you bought, but now you realize that it was a cheaply built series of buildings.   And all the verbal promises of future improvements (like the tennis court) were never built - and such verbal promises are unenforceable.   And worse, the maintenance fee is now nearly double what it was when you "bought" your unit.   You try to sell it, but again, no one wants to buy a resale timeshare.  You are stuck with it forever, unless you can hope to unload it through bankruptcy.  Good luck!
Are there ways to get out from under a timeshare?   There are, but it ain't easy, and you likely will need a lawyer.   You might be able to get some sucker to buy your timeshare (highly unlikely) or take it off your hands for free.  eBay abounds with timeshares selling for $1 or less  - which tells you what they are worth.  Even the best sell for only a few hundred bucks!   You can try donating it to charity - but most charities have figured out the deal with timeshares, and will not accept them as "donations" as they are not worth anything, and now the charity is dunned with the maintenance fees.

So if you bought a timeshare, what do you do?   Call a Lawyer, is my advice.  I don't have a how to dump your timeshare instructions here.   You made a huge financial mistake and are buggered proper, big time, and it may take you a lot of time and money to extricate yourself from this mess.  You may not be able to extricate yourself from this mess at all, if you are otherwise financially solvent.

Funny thing, too, just a few years or months ago, you thought you were "lucky" to get in on the ground floor with this spectacular "investment" - and now you are in a world of pain.

When you read these stories online, you realize what scumbags timeshare sales people are.   And like so many other deadly financial instruments available today, the timeshare contract is something that didn't exist when I was a kid.   Back in 1965, you'd be arrested for fraud for selling a timeshare contract.  And such contracts would be tossed out of court as violating the rule of perpetuities - or routinely discharged in bankruptcy court.

Back then, consumers were protected from a lot of their own folly.   Ahhh... but then you voted Republican - to get rid of all those "onerous regulations" that were "stifling businesses" like timeshare developers.  Poetic justice - you reap what you sow, eh?

Today, our legal and commercial climate is "fuck you buddy!" and if you are dumb enough to put your foot in a bear trap, then you are left to your own devices to gnaw off your own leg to escape from it.   Whether it is high-interest-rate "rewards" cards, onerous "liars loan" mortgages on overpriced mini-mansions, or rotten lease deals, payday loans, title pawn loans, or the like, the name of the game today is to financially ruin the consumer.   And if the consumer isn't smart enough to figure this out, well, then, fuck him.   Right?

And this is sad.   I see a lot of sites out there where people claim they are going to "beat the system" by clipping coupons or buying BoGo deals or scoring "rewards" on frequent flyer credit cards.   They think they are Lucky Mouse who will get all those good deals from the kindly barn cat - while the other stupid mice toil and save like idiots.

So what is weird, is that not only do people step into these bear traps, they join the "I've stepped in the bear trap!" discussion group website, where they exchange posts about how great it is to step in a bear trap, and how having two feet is overrated anyway.   And I am not kidding about this.

If I enabled comments on this blog, you'd see, like clockwork, two types of responses - the first being professional trolls for the timeshare industry, acknowledging that that there are "some bad timeshare deals" out there, but that "buying your vacation!" is a swell idea.  We expect that - an odious industry defending itself through trolling.   But the second group would be people who actually bought timeshares and instead of owning up to their error, double down their bet by saying what wonderful deals they were.

Read this blog entry and scroll down to read all the comments by unhappy timeshare owners.  Some of these folks have been paying maintenance fees for decades for "resorts" they never visited more than once.

It is possible, in this country, to make huge financial mistakes if you are not careful.   And under the new laws we have, you have little or no recourse against these folks.   Caveat Emptor - it is a Latin phrase meaning "we now eat our own children".

Welcome to America, 2015!